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ECONOMY

Which rising costs are consumers in Norway most concerned about?

It feels as if everything in Norway is fast becoming much more expensive than it already was. New figures have revealed which price increases Norwegian households are most worried about.

Pictured is a supermarket in Norway.
Consumers in Norway have shared that they are concerned about when it comes to increased costs. Pictured is a supermarket in Norway. Photo by gemma on Unsplash

In Norway, the cost of living is rising across the board. In August, inflation was measured at 6.5 percent, compared to the same month a year before, figures from national data agency Statistics Norway show.

Additionally, households have been warned on numerous occasions by experts and analysts to prepare for a winter of sky-high energy prices. 

And on Thursday, Norway’s central bank, Norges Bank, announced it was raising the key interest rate by 0.5 percentage points, meaning loan and remortgage repayments will become even more expensive in due course. 

So, which rising cost has consumers across Norway most concerned about? High energy bills have consumers in Norway most worried, according to a survey by Sparebank 1. Norwegian newswire NTB reports that 54 percent of those who responded to the survey are concerned by high electricity prices. 

Analysts in Norway have warned that prices in southern Norway could rise as high as 20 kroner per kWh this winter due to low-reservoir filling levels, the war in Ukraine and soaring gas prices. 

Norway relies on hydro-power to meet its energy needs. However, reservoir filling levels in parts of Norway remain at 20 year lows.

However, the high prices are only felt in south-east and south-west Norway. In north and central Norway, prices are much lower than in the south as reservoirs are fuller and hydroelectric dams typically make more power than these parts of the country need. 

Unfortunately, for those carrying the burden of high energy bills in the south, power from the north is not easily transferred. Typically it needs to be exported to Sweden first and then re-imported. 

After energy prices, the cost of food was the next biggest worry for Norwegian households, according to the bank’s survey results. Some 46 percent of those who answered the survey said food bills were concerning. 

The Scandinavian country is one of the most expensive countries in Europe for food shopping, according to Eurostat, which monitors price levels across the EU, EEA and EU candidate countries. 

Unfortunately, grocery bills in Norway have risen by 10.3 percent over the past year, according to Statistics Norway

As a result, people in Norway are tightening their purse strings and trying to save a few kroner where possible. This is evidenced by the use of the surplus food app Too Good to Go seeing record use last month.

In August, around 245,000 bags of surplus food or groceries were sold via the app- a record for the app. The app allows users to buy surplus food from shops and eateries that would have been thrown away.

READ MORE: Six apps to help you save money on your food shopping in Norway

And finally, 41 percent said that increased interest rates were an issue. Earlier this week, the key interest rate was raised by 0.5 percentage points. 

Norges Bank has said it sees increased interest rates as a tonic to curb inflation. However, this comes with the caveat of higher loan and mortgage repayments. 

For every 0.5 percentage points your loan or mortgage interest increases, your annual interest costs will increase by 5,000 kroner for every million you owe.

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MONEY

Norwegian government open to continued oil exploration

Norway's Oil and Energy Minister Terje Aasland says that, in the long term, in light of the current energy and security situation in Europe, there are increased opportunities related to oil exploration in the Barents Sea.

Norwegian government open to continued oil exploration

The Norwegian government has an agreement with the Socialist Left Party (SV) that the 26th licensing round for oil exploration will not be launched this year.

Still, Minister Aasland told the newspaper Dagens Næringsliv (DN) that he is open to issuing a call for new blocks next year.

“The Norwegian continental shelf is much more attractive now. The Norwegian continental shelf plays a much larger, more important role for European energy security (now) than ever before,” Aasland noted.

The war in Ukraine

Norway became the largest gas exporter to Europe after Russia cut off its gas supply.

“I believe that the opportunity in the Barents Sea in a long-term perspective has been strengthened through the situation that we are experiencing.

“The need for gas has not diminished with the situation that has unfolded with the war in Ukraine…

“I feel that the European Union (EU) wants Norway to develop its oil and gas activities further, (so that it can) be a stable and long-term supplier of gas,” Aasland added.

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